U.S. Justice Dept. to Sue Publishers, Apple, for Price Collusion?

[rhadin]

Originally Posted by SteveEisenberg

IMaybe Amazon would, like WalMart, continue to have a low price corporate culture even after putting virtually all the ma's and pa's out of business. But you can't have a boatload of non-bundled loss leaders forever. A more likely scenario is that predatory pricing is just a temporary tactic leading to much higher prices than before the battle.

Walmart has a low price culture because it has major competitors in Costco and Target, among others. Who would be Amazon's major competitor?

[DiapDealer]

Originally Posted by rhadin

Walmart has a low price culture because it has major competitors in Costco and Target, among others. Who would be Amazon's major competitor?

No one... since agency pricing quite effectively put the final nail in the coffin of any small or medium-sized ebook retailers who might have stood a chance at garnering even the smallest sliver of the ebook pie.

I find it amusing that a pricing plan devised to keep Amazon from "devaluing" print books helped kill any competition they might have had in the ebook market... not to mention forcing Amazon to make more of a profit at the same time.

In my eyes, agency pricing has hurt everyone except Amazon.

[fjtorres]

Originally Posted by DiapDealer

No one... since agency pricing quite effectively put the final nail in the coffin of any small or medium-sized ebook retailers who might have stood a chance at garnering even the smallest sliver of the ebook pie.

I find it amusing that a pricing plan devised to keep Amazon from "devaluing" print books helped kill any competition they might have had in the ebook market... not to mention forcing Amazon to make more of a profit at the same time.

In my eyes, agency pricing has hurt everyone except Amazon.

Try telling that to the "publishers are always right" reactionaries like Turow and his ilk.

Agency pricing is the gift that keeps on giving: while the BPHs and their apologists spend their days and nights dreaming up anti-amazon schemes, the entire industry has changed and continues to change away from their oligarchical control. Things that were unthinkable two years ago not only have come to pass but are actually suceeding.

That is one reason I hope the BPHs don't settle: a year or two of a high visibility legal fight over their practices and dirty linen will keep their attention firmly on the past while the rest of the world continues to evolve beyond their ability to catch up.

With any kind of luck, by the time their hash is settled, they themselves will be a shadow of what they used to be and no longer able to force their schemes on anybody.

[fjtorres]

Over at The Digital Reader blog, Mike Cane has unearthed the "secret" history of book retailing:
http://www.the-digital-reader.com/20...el/#more-31499

[Synamon]

If the agency model was so gosh-darn necessary to protect the little guy from big bad Amazon, why didn't the Big 6 insist on it for paper books?

*crickets*

Originally Posted by SteveEisenberg

Is this true:

Two years after the agency model came to bookselling, Amazon is losing its chokehold on the e-book market: its share has fallen from about 90% to roughly 60%.

Correlation does not equal causation.

The ebook marketplace is brand new and Amazon was well placed from the start, introducing the Kindle 1st generation reader in 2007 and Kindle 2 in early 2009, going international with it before the end of that year. The first Nook didn't hit the market until late 2009 and the first Kobo showed up mid-2010. Sony was their only competition 2 years ago. As the pie for eReaders and ebooks has grown much larger others have grabbed small pieces of it. I haven't seen any evidence that agency pricing had anything to do with the way the marketplace evolved.

[markbot]

I'm against agency pricing since it has effectively reduced competition. The distributors can no longer compete on price...as a result, ebook prices rose significantly. This has allowed some book distributors like B&N to survive, paradoxically...but this is actually inefficient and has hurt other pure ebook stores. If those distributors are too weak they should go bankrupt. Then someone more efficient has to rise to defeat Amazon later. That's how market economies work. creative destruction and chaos.

The fear is that if there were no agency pricing then Amazon would eventually dominate ebooks and thus later they could raise prices. This argument is baloney since you have effectively traded theoretical future Amazon price increases with actual price increases today via the publisher control. Plus, I don't agree that they would have the pricing power later to unilaterally raise ebook prices.

The publishers themselves could compete directly with Amazon in distribution with ebooks at sometime. There is loads of potential competition in ebooks since the distribution costs are so much lower. Amazon will dominate if they are better, and their incumbency advantage and scale are advantages but can be overcome with a better ebook store...such as one that supports epub.

[JSWolf]

Originally Posted by SteveEisenberg

I just checked on my daughter's prime student account. Even though she isn't eligible for the lending library, I could bring up the most popular lending library titles through the technique explained in a post here. The top three titles were published by Scholastic.

The Hunger Games Trilogy. Published by Scholastic Press.

[JSWolf]

Originally Posted by rhadin

I know you are not talking about Amazon directly here, but I am always perplexed when I read how great Amazon's ebookstore's UI is and how great its customer service is.

The customer service is better than that of its competitors, but I wouldn't call it anything close to great.

I've never found its UI to be good. In fact, years ago I bought books at Amazon until it made changes to its UI and I found it much more difficult to find what I was looking for. Occasionally, I look at Amazon these days and still see a UI I find difficult to like. I personally prefer the B&N IU, although I recognize that is not a popular position on MR.

Elfwreck left out one important point...

5. eBooks in a format people want to buy.

That's still Fictionwise as they did sell ePub.

[fjtorres]

Originally Posted by JSWolf

Elfwreck left out one important point...

5. eBooks in a format people want to buy.

That's still Fictionwise as they did sell ePub.

More importantly, they support rocket reader and pretty much every legacy format from the pre-Kindle era.

eReader [-er.PDB]
ePub [.EPUB]
Adobe [.PDF]
Microsoft [.LIT]
Palm Doc [.PDB]
Rocket/REB1100 [.RB]
Franklin [.FUB]
Hiebook [.KML]
Sony Reader [.LRF]
Isilo [-is.PDB]
Mobipocket [.PRC]
Kindle [.MOBI]
OEBFF Full VGA [.IMP]
OEBFF Half VGA [.IMP]

The Price Fix pretty much neutered their entire business model.

[stonetools]

Originally Posted by fjtorres

One more time:

Six companies simultaneously fixed ebook prices at the same *higher* levels, forbidding discounting, and resulting in clear, measurable harm to consumers.
Whether it hurts Amazon or not is irrelevant to the trustbusters.
Whether they "meant well" or not is irrelevant.

If Amazon *had* done something wrong, *they* would be on the carpet facing the DOJ; they *were* investigated too, you know.
For all we know, their day in front of the trustbusters is right around the corner. Random house, too. And don't be sure B&N gets off scott-free. Once one of the BPHs rolls, the dominoes start falling and there's a lot more players benefitted from the scam than meets the eye.

Big money-making companies conspired, consumers were hurt, the feds are not amused. (And it's an election year.) That is the bottom line.

All else is just posturing and finger-pointing.

Im sorry but there's more to it than that. According to a recent supreme court opinion a manufacturer can set minimum Prices for its goods under a doctrine called resale Price Maintainence . The court may just find that a group of manufacturers can do the same thing under certain conditions. In my view the publishers and other booksellers feel very strongly about stopping Amazon from monopolizing the retail market. Some may feel strongly enough that they may want to go all the way to the supreme court. I think the DoJ leaked this because they wanted to drive relcalitrant parties to the bargaining table. If that doesn't w

Work you might see a supreme court case and an extension of the resale price Maintainence doctrine

[markbot]

Originally Posted by stonetools

Im sorry but there's more to it than that. According to a recent supreme court opinion a manufacturer can set minimum Prices for its goods under a doctrine called resale Price Maintainence . The court may just find that a group of manufacturers can do the same thing under certain conditions. In my view the publishers and other booksellers feel very strongly about stopping Amazon from monopolizing the retail market. Some may feel strongly enough that they may want to go all the way to the supreme court. I think the DoJ leaked this because they wanted to drive relcalitrant parties to the bargaining table. If that doesn't w

Work you might see a supreme court case and an extension of the resale price Maintainence doctrine

In this case, I don't think it is resale price maintenance since in agency pricing the retailer doesn't buy the book and resell it....they sell it on behalf of the publishers and take a 30% fee. I think this is the case. Agency pricing is perfectly legal I believe but in this case it is considered price fixing, perhaps, because all the major publishers changed to it at the same time via Apple.

[stonetools]

Originally Posted by markbot

In this case, I don't think it is resale price maintenance since in agency pricing the retailer doesn't buy the book and resell it....they sell it on behalf of the publishers and take a 30% fee. I think this is the case. Agency pricing is perfectly legal I believe but in this case it is considered price fixing, perhaps, because all the major publishers changed to it at the same time via Apple.

Well you may be right about the model but the courts reasoning in the case seems very applicable here. The court did find that a manufacturer could dictate minimum prices to a retailer under certain conditions and the conditions the court found acceptable are a lot like what the publishers have been talking about.

[Elfwreck]

Originally Posted by stonetools

Im sorry but there's more to it than that. According to a recent supreme court opinion a manufacturer can set minimum Prices for its goods under a doctrine called resale Price Maintainence.

Yes, but five manufacturers and a retail outlet can't coordinate their efforts to raise all their prices at the same time and force that new pricing model on other retail outlets.

The issue isn't "are publishers allowed to set their own prices?" but "did supposedly-competing companies coordinate their efforts, drastically changing years of established business practices and strong-arming changes to existing contracts, to inflict higher prices on consumers?"

[tubemonkey]

Originally Posted by SteveEisenberg

Maybe Amazon would, like WalMart, continue to have a low price corporate culture even after putting virtually all the ma's and pa's out of business.

When a ma and pa bites the dust, the entire blame goes to former customers who no longer shop there. It's not Walmart's fault.

[stonetools]

Originally Posted by Elfwreck

Yes, but five manufacturers and a retail outlet can't coordinate their efforts to raise all their prices at the same time and force that new pricing model on other retail outlets.

The issue isn't "are publishers allowed to set their own prices?" but "did supposedly-competing companies coordinate their efforts, drastically changing years of established business practices and strong-arming changes to existing contracts, to inflict higher prices on consumers?"

It may depend on whether they are doing it purely for profit or for business reasons that the court finds acceptable . You want to end the analysis on whether the price is higher for the consumer in the short term. The courts analysis goes beyond this.